Health insurers that are anxiously waiting for healthcare reform to shake out before moving forward may find themselves well behind their competitors.
It’s understandable that health insurance companies don’t want to invest in big-dollar projects, such as in the area of underwriting, without knowing how the industry is going to change. If healthcare reform implements an individual mandate coupled with health insurers accepting all members—regardless of preexisting conditions—the underwriting process that has become health insurance’s foundation will evaporate. Investing in that area doesn’t make sense now, but Dan Maynard, president and CEO of Connecture in Waukesha, WI, says health plans must use flexible technology solutions to prepare for the future. Health insurers shouldn’t stay transfixed on the horizon, as there is a more pressing need—the destruction of the employer-based health insurance market, most notably the small group market. As more Americans are bounced from employer-based health insurance, they are flooding the individual health insurance market, which insurers realize is their present and future, but many are struggling with how to not lose money in individual insurance.
To survive healthcare reform and the decimated employer-based market, Maynard suggests a combination of technology and marketing, which he says will play a much larger role in the near future.
That’s because the combination of an eroding employer-based health insurance market coupled with healthcare reform will force insurers to compete for members, as is commonplace in other industries.
What could health insurance marketing’s future look like? Think car and life insurance. Television shows feature ads from Geico, Progressive, and Aflac. Health insurers may soon become as much a staple of television and will need marketing departments that understand what consumers want.
The technology/marketing push will help insurers develop new products, perform lead management, quote rates to consumers, improve enrollment, and retain members. Maynard says the future of health insurers is in the following four areas:
Soon, health insurers will need to create a platform that will allow insurers to promote products across various market segments. This technology will include a single location for prospective and current members to learn about product information and availability.
“It’s one thing to have a marketing site, it’s another thing to be targeted to different types of consumers providing different targeted campaigns around your quoting and your lead [generation] activities. Health plans are a long ways away from that kind of technology-supported targeted marketing on the Web or otherwise,” says Maynard.
Of course, people receive information in different ways. This means health insurers will need to create outreach across multiple avenues. Whereas young adults appreciate Web communication through fast processes, senior populations may need additional considerations, including user interface that is compatible with screen-reading applications and flexibility in font size and site view. Seniors might also need additional support through phone calls or even face-to-face communication.
Fewer people with employer-based insurance means health insurers will need to invest in direct-to-consumer offerings as well as interactive Web sites, call centers, and maybe even retail stores.
Having fewer underwriting possibilities, insurers will benefit by creating Web sites with real-time underwriting processes that allow customers to enroll immediately and the health plans to use the information to design wellness programs tailored to the individual, Maynard says.
The fourth of Maynard’s suggestions would seem like common sense, but most health insurers don’t use analytics, and those that do are not doing enough. Insurers must make sure their Web sites are reaching all people, says Maynard.
Health insurance companies can check this by measuring the site’s performance, collecting customer experience data, analyzing the most effective pages, and determining which marketing campaigns are most effective. With this information, insurers can find out where they are losing out on potential sales, he says.
“Certain analytics provide you a lot of that intelligence to do so. Many health plans now don’t have basic reporting methods, let alone targeted analytics,” says Maynard.
Maynard says he and Connecture are recommending these four areas of improvement, but the health insurance industry is “very immature” in these targeted marketing capabilities, unlike other industries, such as the financial sector and other insurances. Implementing these changes will be difficult and costly for insurers, but those who are focusing their energies solely on what’s happening (or not happening) in Washington are making a mistake. The loss of the employer-based system is a potentially devastating problem that is now before health insurers. And that momentum is not coming from Pennsylvania Avenue; it’s coming from Main Street.